I've been writing about the auto industry since 1992—first as Business Week’s Detroit bureau chief, then as editor of online news journal AutoBeat Daily. What keeps it interesting is covering everything from management, strategy, finance, marketing, M&A and labor to safety, global development, the environment and new cars and trucks. Although I grew up in Detroit, I hardly had gasoline flowing in my veins. Before I became embroiled in all things auto, I covered finance in Los Angeles, Chicago, New York and Detroit. I attended the University of Notre Dame and Columbia University’s graduate school of Journalism School. I tacked on a semester of courses at the Columbia Business School—learning just enough to be dangerous. A year in the University of Michigan’s Knight Wallace journalism fellowship gave me a chance to study the intersection of e-commerce and the auto industry. Hard to believe, but in 2001, that was a cutting-edge topic.

Auto Fuel Economy: Maybe You Can Have Your Cake and Eat It Too

Picture American auto showrooms a decade from now: dominated by tiny cars, pricey hybrids and even more expensive electric vehicles. Carmakers have been forced to jettison many of their gas-guzzling luxury models, big pickup trucks and SUVs, leaving fewer, more expensive choices for consumers.

That was the scenario that conventional wisdom painted a few years ago when the U.S. adopted strict new fuel economy standards requiring cars and light trucks to average 54.5 miles per gallon by 2025. The harshest critics predicted that many Americans would be priced out of the new-car market and Detroit would suffer disproportionate losses.

But maybe not. Bank of AmericaBank of America Merrill Lynch analyst John Murphy told the Automotive Press Assn. in Detroit today that the launch late this year of the next generation of Ford MotorFord Motor Co.’s F-150 fullsize pickup truck is “incredibly important” to watch for signs that the future of fuel-thrifty models won’t be so dire.

Ford boasts it has slashed the new truck’s gasoline consumption 30% by using an aluminum body to help shave vehicle weight by 700 lbs and equipping it with a peppy, fuel-efficient twin-turbo V-6 engine. If consumers jump on the bandwagon, Ford could continue to reap big-truck profits while meeting ever-tougher government standards, Murphy says. That would prompt a lot of “fast followers” in the auto industry, he adds. Americans wouldn’t have to give up their macho wheels.

What’s more, Ford would no longer need to peddle loads of small cars just to offset truck sales. A company’s fuel economy is the average across all the models it sells. For decades, the only way domestic automakers could rake in the huge profits from their popular gas-guzzling big trucks and SUVs was by offsetting them with heavy sales of fuel-sipping small cars—often at a big loss.

The new F-150 could be the industry’s first big truck to meet fuel-economy rules all by itself—no offsets needed, according to Murphy.

The analyst says the other sector to watch is compact crossover vehicles. Companies will attempt to persuade shoppers that models such as Honda MotorHonda Motor Co.’s 2017 CR-V are a step up from small cars. If buyers are willing to pay more for a crossover than a car of the same size, automakers could boost profits and improve fuel economy—all without leaving consumers feeling deprived.

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The key to thermal efficiency with internal combustion engines is compression. The higher the compression, the greater the output of power and thermal efficiency.

The key to higher compression is octane. Octane is a relative comparison number that measures the resistance of a fuel to preignite. Meaning to explode within the cylinder before TDC(top dead center) of the power stroke. Preignition(sometimes called knock) can destroy and engine very quickly if it is bad enough.

Gasoline has an octane of 85-87. Which translates to a compression ratio of about 10.5: 1. Ethanol has a comparative octane rating of ~115. An engine set up for and running on ethanol can be taken safely to a compression ratio of 24:1. The typical thermal efficiency for gasoline engines is 20-25%. This can be doubled using ethanol fuel.

The problem is not the vehicles we are building. The problem is the fuel we are using.

But the problem with Ethanol is that it is still wildly expensive to produce. AFAIK, GM never succeeded in producing the stuff from wheatgrass like they hoped. And to make using ethanol effective, the engine has to be set up to run ethanol ONLY. If you build it as a “flex-fuel” engine fuel economy actually suffers.

I wish Ms. Kerwin had specified exactly what she meant by “no offsets needed.” I highly doubt the turbo V6 F-150 will be 50mpg!

I think this is exactly what American drivers want — large, flexible vehicles that sip gas. Chrysler has a couple of other examples coming down the pike — a plug-in hybrid minivan and a plug-in hybrid full-size crossover. It’s about time!